Akasa Air, the fastest growing airline in the Indian skies, celebrates its first birthday today. Exactly a year back, on Aug 07, 2022, its first commercial flight took off for Ahmedabad from Mumbai. Akasa had secured funding from the late Rakesh Jhunjhunwala, a man who is believed to have had the midas touch.
Let’s take a look at the year gone by.
Birth pangs
The first flight was graced by the presence of Jhunjhunwala, a maverick investor. But exactly a week later, he died in Mumbai. While Jhunjhunwala was not going to be actively involved in the day-to-day operations of the airline, having his name — and reach — meant a lot. An early investor in the airline, Jhunjhunwala, for instance, could’ve helped the company raise funds.
Bengaluru-based
With some of its co-founders being based in the country’s financial capital, the airline chose Mumbai as its HQ. But thanks to the congestion and lack of slots and night parking at Mumbai, the airline chose Bengaluru as its hub.
This was a strategic decision, for it gave it access to a market that was well-off, had a migrant population, with an airport could support growth. Having started in August, by end-December Akasa had become the third-largest domestic player out of Bengaluru, a feat that would not have been possible either at Mumbai or Delhi.
Just do it
The first set of aircraft to start operations had USB charging ports, a good differentiator. But the next lot came without these and had seats that were different. Further, the airline took delivery of aircraft which were destined for Jet Airways, which means they came in a two-class configuration (business and regular) and not in the single-class set-up that’s standard for LCCs (low cost carriers). The result? The airline has myriad aircraft subtypes, which can increase inventory and maintenance costs.
Given a choice between waiting for the right set of seats amid a supply chain shortage and deploying whatever was available, the airline opted for the latter. While that may not be ideal, it may have made sound business sense at the time.
Wriggle room
The fall of Go FIRST has given the airline wriggle room at Mumbai and Delhi. With slots suddenly opening up, the airline reduced its flights from Bengaluru — just months after it talked about becoming number two there — and added capacity in Mumbai and Delhi, the two busiest airports in the country.
However, that meant that its southern network was compromised, having pulled out of multiple sectors or reduced frequency drastically, something which the market typically does not like. However, Indians are loyal to low fares above all, and the airline can win passengers back so long as it bears that in mind when scaling up down south.
Weakened competition
Akasa has been blest with three things — the fall of Go FIRST, the problems at SpiceJet, and AirAsia India not expanding even after the merger with Air India Express. As the airline readies itself for an international foray by the end of this year, will lady luck continue to smile on it?
What to look forward to
Vinay Dube, the airlines’ CEO, has repeatedly talked about a triple-digit order by the end of the year. The airline has taken delivery of 20 B737 Max 8 aircraft, including its first B737 MAX8-200, which seats 197. Barring four more B737 Max 8s, the rest of the planes the airline has ordered are the MAX 8-200. We need to see how passengers find it given its tighter seat pitch.
The airline’s focus between this and the next birthday is likely to be consolidation and selective expansion. Its network is vast for a 20-aircraft airline, and unless it consolidates its unit economics won’t improve.
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